The Industrial World

8/3/2019 The Industrial World

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The Industrial WorldTypes of Industry

Primary IndustryDirectly involved with raw materials (eg. Mining)

Secondary IndustryProcesses raw materials and package manufactured goods

Type Light

Industry

Heavy Industry

Amount of raw materials Small Large

Amount of land required Small Large

Nature of products Lightweight Heavyweight

Amount of pollution Less pollutive More pollutive

Type Labour-Intensive Industry Capital-Intensive Industry

Requires Large amount of labour Machines, technology

Capital is invested in Salaries of the people The machines and technologies

Tertiary IndustrySells products obtained from secondary industries (eg. Selling food)

Quaternary IndustryProduces new technology and information by researching.

(eg. Companies may seek a consultancy firm for finance tips)


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Factors affecting Industrial Location

Physical Factors Description Examples

Land Land is needed for bulky machineries Chengdu Airframe Plant(11km away from Chengdu)

Raw Materials Weight-losing industries can save costson transporting raw materials.

Iron and Steel Industry(1,100mil tonnes of iron oreare needed to produce 572miltonnes of iron)

Energy Companies prefer to locate in placeswhere there is a steady flow of energy.

InLDCs, lack of properinfrastructure causes unstableflow of energy.

Human Factors Description Examples

Capital Companies prefer to locate in placeswhere the costs of buildings are low.

Singapore (flatted factoriesare pre-build)

Labour Industries prefer areas with low labourcost. Sewon, a footwearmanufacturer.(Manufactured in China tosave $10,000 per workerevery year)

Market Weight-gaining industries can save costson transporting its products or goods.

Toyota Motor Corporation(Has factories all over theworld to assemble vehicleparts

Government Decides and plans the development ofindustries in a country.

Singapore(Industries are located in

industrial parks)Technology Advancements in technology have

overcome physical constraints.Transmission lines(transmits energy to manyareas)

Transport Good transport reduces transport costIndustries are attracted to places withefficient transport systems.

Chicago, USA

(less traffic jams to reducetransport costs


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Reasons for Trend of Transference

Competitive Advantages Description Examples

Lower Costs Costs Low=Profits HighLabour costs in LDCs low.

Sri Lanka (Wages forworkers are $0.48)

Government Incentives Free Trade Zones (FTZs)Infrastructure is pre-built,government requirements arelowered and tax exemption isgiven.

Malaysia(Projects involving heavyinvestments and use of hightechnology are exemptedfrom tax)

Large Markets Rapid population growth=Higher demand for goods

China

(In 2015, China will becomethe second largest consumergoods market in the world)

Space-shrinking Technology Description Examples

Transport Advancements in technologyhave reduced transport time. Commercial Jet Aircrafts(Transports goods quickly,especially perishable goods)

Communications Advancements in technologyhave made communicationbetween people in differentplaces faster and moreconvenient.

E-mail(Faster communicationbetween countries andheadquarters in DCs cancoordinate their branches inLDCs)

Containerisation Increased speed andefficiency of moving goods.

Singapore(Containerisation shortens

the time that ships have todock at the port)

Impacts of Trend of Transference

1. Shift in manufacturing-related jobs from DCs to LDCs:

-Manufacturing industries move from DCs to LDCs

-Hence, fewer people in DCs are involved in manufacturing industry while more people in

LDCs are involved.

2. Increase in export of manufactured products in LDCs:

-Manufacturing Industries move from DCs to LDCs

-Hence, the manufactured products are exported to other countries.

3. Increase in foreign investments in LDCs:

-Foreign companies that carries out its activities in LDCs have to spend money

-Hence, more money flows into the countrys economy


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Characteristics of Newly Industrialising Economies (NIEs)

1. Fast rate of growth in manufacturing:-Manufacturing industries expand rapidly

-Hence, employment rate increases.

2. Rising share of world exports in manufactured products

-Huge growth in manufacturing industries

-Hence, their exports are greatly increased, making them major exporters.

3. Fast growth in real per capita income

-More people are employed ; economy benefits from increase in exports

-Hence, the wealth generated by each person increases quickly.


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India as an NIE

Reasons Description Examples

Land Industrial parks that wereconstantly expanded were

allocated for the industries.

Technopark(Located in the state of

Kerala, it housed more than100 companies thatspecialized in IT products.Plans were also made toexpand it by another 2km2)

Skilled Labour Abundance of skilled labourat low costs attracted manycompanies.

State of Tamil Nadu

(Every year, it producesabout 43,000 engineeringgraduates and 61,000diploma holders)

Lower cost of labourIndia worker- US$7 per hourDC worker- US$40 per hour

Government Support The government had beenactively encouraging thegrowth of industries throughintroducing policies andincentives.

Special Economic Zones

(SEZs were set up to offerincentives such as taxexemptions. It also allowedforeign investors to have100% ownership ofbusinesses that manufacturedproducts solely for export)

Market The 1.1 billion populationensured a strong demand forelectronic products.

Mumbai

(With high employment ratesleading to increasing levelsof income of its people,demand for consumerelectronics and householdappliances grew greatly, thusattracting TransnationalCorporations or TNCs)


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Challenges Description Examples

Infrastructure Poor infrastructurediscourages foreign investorsas they fear that there mightbe a loss in profits.

World Bankreported thatcompanies in India suffered apower failure almost everytwo days, resulting in

interruption of production.

Hyderabad(7 million trips on transportwere made every day, 4times more than what theroads in the city can hold,causing delays in production)

Shortage of Component Parts Various components wereneeded to be assembled intoproducts. India turned to

importing components fromother countries as the localsupply was insufficient.

India imported componentsfrom countries such asChina. The high costs of

importing discouragedforeign investors.

Technology The electronics industrylagged behind as it startedonly in 1990s. Thus, itstechnologies were low-leveled. Hence, TNCs maychoose to locate in areasoffering better technology.

Only 0.8% of Indias GDP

was spent on Research andDevelopment (R&D).

Competition from other NIEs India faced intensecompetition from NIEs suchas China, whose strongperformance makes India aless favourable location.

Chinasshare of the worldelectronics production grew

from 10% in 2008 to 18% in2003.

Strategies Taken Description Example

Managing depletingresources

The fast population growthand migration into citiescaused the deterioration of

urban areas anddisappearance of naturalvegetation.

The government of India,together with the UnitedNations (UN), implemented

policies to control land useand promoted sustainablehuman settlementdevelopment.

Appropriate use oftechnology

Industrialisation causedincrease in demand for rawmaterials. Mining of rawmaterials cause pollution.

Jharia Coalfield(contemporary techniques toreduce the scale of miningwere used)

Recycling Old products are not properlydiscarded, generatingmassive Electronic Waste

(E-Waste)

Ash Recyclers(Worked with TNCs todismantle E-Wastes and

recycle the usefulcomponents)


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Documents

The Industrial World